Many Canadians applying for mortgages and other loans are being turned away by banks. People who are rejected by banks can ask a private mortgage broker about lenders in Hamilton. Hamilton private mortgage lenders have more lenient lending requirements than the major banks. As of October 17th, 2016 the major banks have increased the requirements for mortgages, making it more difficult for the average Canadian to get approved. Our lenders are not subject to these same rules and can provide funding for your home, even if you have bad credit. Private lender interest rates are usually higher than a bank loan.
Hamilton Private Mortgages
Our private mortgage lenders in Hamilton include companies and individuals who are looking to invest their own personal money. There is a lot of demand from lenders to invest in Hamilton’s real estate. Many private lenders specializing in specific geographic areas, such as the Greater Toronto Area. These private lenders will lend a minimum of $20,000 and typically for 1-year terms. When getting a loan from a private lender, the loan would be secured against the property. Private loan lenders do not consider credit score when lending money. Private mortgages lenders in Hamilton consider your home’s market value and the value of all loans currently registered against the property. Loan to value (LTV) ratios are a key metric these lenders use, and it is equal to existing mortgages divided by the market value of the property. For example, if a house in Hamilton could sell for $100,000, and it had a $60,000 first mortgage, the LTV would be 60%. Most Hamilton private money lenders will lend on properties that don’t exceed 85% LTV, and in rare cases will go up to 90% LTV.
A Loan-to-Value ratio for a property is equal to all mortgages on a property divided by the appraisal value of the property. If you own a home worth $1,000,000 and get a new first mortgage for $750,000 then your LTV ratio is 75% (i.e., 750,000/1,000,000)
Most banks and other A-Tier Lenders can loan up to 95% LTV provided that the borrower has a good income and credit score. Most non-bank lenders can lend up to 75% LTV but can overlook income and credit issues.
Reasons to Get A Private Lender Mortgage
There are a few reasons why someone would need the services of a Hamilton private lender. These reasons include:
- Consolidate debt and reduce interest payments
- Renovate the property to increase its value
- Loss of a job
- Separation or divorce
- An illness that leaves you unable to work
Many of these reasons would normally disqualify a person from being approved from a traditional bank loan. We specialize in getting mortgages for people with bad credit and are able to help you qualify for a low-interest loan after the private mortgage is ended.
Of all the different types of lenders, private mortgage lenders have the most lenient approval criteria. Private lenders will generally provide mortgages up to 75% of the value of the property. Most private lenders can only offer mortgages on typical residential homes worth at least $100,000. The ratio between the value of the requested mortgage and the value of the property is called a “Loan-to-Value” (LTV) ratio and is the main factor when it comes to approval on a private mortgage. These criteria are different from those of Banks, Trust Companies, and Credit Unions, which will also consider a borrower’s income ratios, employment, and credit score in addition to their LTV ratio. Private lenders are usually not concerned with the creditworthiness of the borrower.
Since private mortgages are considered to be a high-risk investment, these lenders demand higher rates and fees. A borrower can expect to pay rates between 7% to 12% and fees equal to 4% to 6% of the mortgage amount. The rates are dependent on the LTV ratio, while the fees are dependent on the complexity of the mortgage, which includes the cost of dealing with any legal issues. Approval can also depend on the location of the property, and in general, larger cities will have higher maximum LTV ratios. This rate estimation tool will take into account all of these factors and estimate what interest rate you can expect to pay for a mortgage.
Faster Loan Financing
Banks and other traditional lenders are known to have a lengthy approval process which takes weeks. Even when you provide a bank with everything they request, they will still take a long time to process the paperwork, which may put your plans to buy a house in jeopardy. One of our specializations is providing real estate financing in emergency situations. If you have a real estate deal that may fall apart if funding isn’t provided immediately, then you may want to look into our private lenders in Hamilton.
We have an extensive network of lenders in the Hamilton area, and our mortgage brokers have a lot of experience with the Hamilton real estate law firms. We routinely deal with difficult and time-sensitive real estate transactions, including bad credit mortgages.
Information on Hamilton Private Mortgage Lenders
Average house prices in Hamilton have been rising dramatically in recent years, making the city very attractive to investors. The improved Go Transit service, the completed Red Hill Valley Parkway and the Hamilton airport are all reasons for the increase in property values in the city. Hamilton is moving away from the production of steel and is a popular destination for people who are moving outside Toronto due to high house prices.
Private Hard Money Lending
Private hard money lenders operate just like most other private lenders. Hard money refers to hard assets such as houses, commercial buildings, plazas, rental properties. Call our private mortgage brokers to find a hard money lender in your area. They can direct you to the best lender that can provide financing for your house or real estate. Private money lenders usually like to personally inspect the properties they lend on and will need to see financial statements if the money is required for commercial or rental properties.
Private Real Estate Financing
Getting a loan for your home or another real estate project can be difficult without the assistance of a private mortgage broker. Our mortgage brokers can help you with all the required loan documents whether it is a new home purchase or refinancing a commercial building. Refinancing commercial properties such as plazas, stores, buildings and mixed-use properties takes longer to arrange. The interest rates for commercial properties is usually higher than interest rates for a house. Private money lenders for real estate can also provide valuable information on property values.
Bad Credit Private Lenders
Having a bad credit score is not that unusual. If you missed a few credit card payments you can end up with a low credit score. Private lenders base their loans on the amount of equity in your home, not your credit score. The interest rate will be higher than the bank but you can still qualify for a loan with a private lender even after the banks have turned you down.
Sub Prime Mortgage Lending
If you have a low or poor credit score and you need to get a mortgage, lenders could classify your loan as a sub-prime mortgage. Other reasons for classifying a mortgage as sub-prime are not enough income to cover the mortgage payments or the loan to value ratio on the house is too high. Subprime mortgages are treated in the same manner as a bad credit mortgage. The sub-prime interest rate will be higher and they are usually short term mortgages.